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OUR COMMITMENT TO YOU

2004 SUSTAINABILITY REPORT

www.cemex.com

CEMEX CPO

Table of contents

Pg. Section GRI IndicatorIFC About this report 2.11, 2.12, 2.13, 4.12 Message to our stakeholders from

our Chairman and CEO 1.24 CEMEX company profile 2.1, 2.2, 2.3, 2.4, 2.5, 2.14, 3.18 8 Our sustainability vision, strategy,

and management 1.1, 3.7, 3.14, 3.1910 Governance 3.1, 3.2, 3.5, 3.6 11 Stakeholder engagement 2.9, 3.10, 3.12

14 Economic performance 2.7, 2.8, 3.20, EC118 Environmental performance 3.20, EN2, EN8, EN17, SO424 Social performance 3.20, LA5, LA7, LA17, SO1, SO431 Glossary32 Contact information 2.10, 2.22

We have used the Global Reporting Initiative (GRI) 2002 Sustainability ReportingGuidelines as well as the Cement Sustainability Initiative Agenda for Action to inform thecontent and structure of this report. Detailed descriptions of the GRI indicators listedabove can be found at www.globalreporting.org/guidelines/2002.asp.

About this reportCEMEX’s 2004 sustainability report is an important part of our ongoing efforts to com-municate our approach to sustainable development and our company’s economic,social, and environmental performance. In this report—our second—we further defineour commitment to you, our stakeholders, and discuss how we see CEMEX contributingto a sustainable future.

Unless we have indicated otherwise, the information presented in this report coversCEMEX’s global operations for the 2004 calendar year and includes aggregated datawherever possible.

Reporting historyCEMEX first published an environmental report in 1995. Our next report covered ourenvironmental, health, and safety performance for 1996 and was followed by annualEHS reports. In 2003 we issued our first sustainability report. All of our reports publishedsince 1997, including sustainability, EHS, and annual financial reports, can be found onour website, www.cemex.com.

2

The information presented herein contains certain forward-looking statements and information relating to CEMEX,S.A. de C.V. and its subsidiaries (collectively, “CEMEX”) that are based on the beliefs of its management as well asassumptions made by and information currently available to CEMEX. Such statements reflect the current views ofCEMEX with respect to future events and are subject to certain risks, uncertainties, and assumptions. Many factorscould cause the actual results, performance, or achievements of CEMEX to be materially different from any futureresults, performance, or achievements that may be expressed or implied by such forward-looking statements,including, among others, changes in general economic, political, governmental, and business conditions globally andin the countries in which CEMEX does business; changes in interest rates; changes in inflation rates; changes inexchange rates; the level of construction generally; changes in cement demand and prices; changes in raw materi-al and energy prices; changes in business strategy; and various other factors. Should one or more of these risks oruncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially fromthose described herein as anticipated, believed, estimated, or expected. CEMEX does not intend, and does notassume any obligation, to update these forward-looking statements. In addition, certain information presented here-in was extracted from information published by various official sources. This information includes statistical informa-tion relating to the cement industry and information relating to the countries in which CEMEX operates. CEMEX hasnot participated in the preparation or compilation of any of such information and accepts no responsibility therefor.

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CEMEX’s mission is to serve the global building needs of

its customers and build value for its stakeholders by

becoming the world’s most efficient and profitable

cement company.

• Our products shelter people and connect communities

• Our people set an example of integrity and excellence for

others to follow

• Our operations protect and maximize natural capital

• Our strategy creates lasting value and economic prosperity

Together with our stakeholders, we are building a

sustainable world for future generations.

2

We at CEMEX have built our business around continuous

improvement, and we know that the challenges of sustainable

development require a relentless focus on originality in both

thought and action. We bring this discipline to bear on all of our

efforts to build a more sustainable and responsible CEMEX. We

are committed to ensuring the well-being of our employees,

protecting the environment, and contributing to the growth of

societal infrastructure and the development of our communi-

ties. We are guided in our efforts to meet these commitments

by our environmental, health, and safety policy; the Cement

Sustainability Initiative (CSI); our relationships with our stake-

holders; and the highest ethical standards. In this, our second

sustainability report, we discuss our progress over the past year

in pursuit of these objectives.

These are exciting times for CEMEX. We took an important step

in executing our business strategy by acquiring RMC Group. The

acquisition will extend our global presence, strengthen our posi-

tions across the value chain, and allow us to better integrate

our core cement, ready-mix, and aggregates operations. It will

also strengthen our financial position and allow us to continue

to grow profitably throughout the business cycle. Ultimately, this

acquisition will enable us to better serve our customers and

bring greater value to our investors.

This acquisition also offers our new and existing employees

great opportunity for professional growth. We extend to our

new colleagues a warm and enthusiastic welcome, and we look

forward to helping them achieve their professional goals.

Our presence in new communities brings with it both an oppor-

tunity and a responsibility to reinforce our commitment to be a

responsible neighbor. Wherever we operate around the world,

our code of ethics, our company values, and our governance

standards will guide our actions and help us build lasting and

productive relationships with all of our stakeholders.

Building for future generations

Lorenzo H. Zambrano, Chairman of theBoard and Chief Executive Officer

3

We are pleased to present the tangible results of our efforts.

These positive outcomes can be seen in various dimensions of

our business operations—including health and safety, customer

service, and product design:

> Employee health and safety remains our top priority. In 2004

we continued to move toward our goal of zero lost-time

injuries, reducing our consolidated accident rate to 1.46%

from 1.60% in 2003. In our concrete sector, we achieved an

all-time low of 1.20% in 2004.

> In 2004 we began sourcing electricity from the Termoeléctrica

del Golfo (TEG) power plant in Mexico. TEG, which uses lower-

cost pet coke, employs special technology and lower operat-

ing temperatures that reduce emissions of sulfur oxides and

nitrogen oxides compared with those of conventional fuel-oil

power plants.

> We are encouraged by the success of the initiatives we have

designed to address the distinct needs of customers, from

large contractors to individual homebuilders. Now in its sev-

enth year, our Patrimonio Hoy program continues to provide

credit, materials, and training to underserved communities.

And our newly launched Construcard initiative offers credit

and financing options for small contractors and individuals.

> We are using the principles of sustainable design to bring

innovative products to market—ones that offer not only

superior performance but also environmental and social ben-

efits. For example, our new paving concrete, Llancreto, incor-

porates used tires to produce a smoother road surface.

These initiatives serve our employees, customers, and commu-

nities and also strengthen our business.

These are exciting times for CEMEX. We

took an important step in executing our

business strategy by acquiring RMC Group.

We recognize that sustainable development is an evolving

process that requires continuous self-evaluation and improve-

ment. Therefore, we are working with our industry peers

through the CSI to establish new standards for sustainability

performance and refine those that already exist. In line with the

CSI Agenda for Action, we have agreed to track our perform-

ance in the areas of air emissions, employee health and safety,

use of alternative fuels and raw materials, and local impacts. We

are also in the process of defining our own company-specific

goals and targets in these areas.

We thank you for your trust in our company and for your sup-

port of our efforts to become an ever more sustainable, respon-

sible organization. As our partners in creating solutions for

today and tomorrow, we invite you to share with us your com-

ments regarding this report and our performance. We look for-

ward to continuing to work with you in building a sustainable

world for future generations.

Sincerely,

Lorenzo H. Zambrano

Chairman of the Board and

Chief Executive Officer

44

Meeting the world’s construction needsWe make cement and ready-mix concrete, building productsthat, quite literally, form the foundation for every kind of build-ing project and help to improve the lives of people all over theworld. The many qualities of cement and the concrete madefrom it make these the world’s most popular building materi-als. In fact, second to water, concrete is the most-used sub-stance in the world. In 2004 we sold approximately 65.8 mil-lion metric tons of cement and 23.9 million metric tons of con-crete in more than 60 countries throughout the world.

Global presence . . .Our network of cement and ready-mix plants, distributionfacilities, and marine terminals strengthens our ability to serveour customers throughout the world. We operate facilities inmore than 30 countries and have established trade relationswith more than 60 countries. Our global presence allows us tobring our cement and ready-mix products to customers insuch major markets as Mexico, the United States, and Spain andin countries in Central and South America, Southeast Asia, andAfrica. Our acquisition of RMC expands our production and dis-tribution capacity in the major European markets and solidifiesour leadership position as one of the world’s largest cementand building-materials companies.

our global trading operationsOur global trading network gives us tremendous flexibility andenables us to optimize our worldwide production capacity bybalancing supply and demand throughout our regional mar-kets. Our worldwide network of strategically located marineterminals allows us to coordinate maritime logistics on a glob-al basis and minimize transportation expenses. Our tradingoperations also enable us to explore new markets without sig-nificant initial capital investment.

. . . local knowledgeOur local operating networks allow us to provide broad cover-age and better service to our customers. We carefully plan thelocation of our distribution centers to ensure that customers,distributors, and contractors have ready access to our prod-ucts where and when they need them. When we open a facili-ty in a new location, we take care to learn the culture of thecommunities that we will serve in order to better anticipateand meet their needs.

CEMEX profile

We embrace our responsibility to lead our industryin its efforts to eliminate or minimize its environ-mental and social impacts.

Operations at a glance

We have> production capacity of more than 80 million metric

tons of cement per year

> 71 cement plants, 17 of which have minority

participation

> 490 ready-mix plants

> 189 distribution centers

> 61 marine terminals

> trade relations with more than 60 countries through-

out the world

Key 2004 statisticsin millions of US dollars, except employee amount

Employees 26,679Sales 8,149Operating income 1,852Assets 17,381

SALES, EBITDA, AND MAJOR ACQUISITIONSmillions of US dollars

94 95 96 97 98 9992919090 93 00 01 02 03 04

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Our building products shelter

people, build communities, and

help improve the lives of people

all over the world.

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PRODUCTION CEMENT CEMENT READY-MIX LAND MARINECAPACITY PLANTS PLANTS PLANTS DISTRIBUTION TERMINALSMMT/YEAR CONTROLLED MINORITY PART. CENTERS

Mexico 27.2 15 3 211 68 8United States 14.3 13 4 97 48 6Spain 11.0 8 0 77 11 19Venezuela 4.6 3 0 35 12 4Colombia 4.8 5 0 22 2 0Central America &

Caribbean* 4.0 5 6 36 12 10Egypt 4.9 1 0 3 4 1Philippines 5.8 3 0 0 7 3Indonesia 4.4 0 4 9 25 10Thailand 0.7 1 0 0 0 0TOTAL 81.7 54 17 490 189 61

As of December 31, 2004*Includes Barbados, Costa Rica, Chile, the Dominican Republic, Jamaica, Nicaragua, Panama, Puerto Rico, and Trinidad & Tobago.

Did you know?

> Cement is a powdery binding material that is mixed with water

and sand and gravel or other aggregates to make concrete

> Each year about 1.6 billion metric tons of cement are sold, and

enough concrete is used worldwide to account for more than

three metric tons for every man, woman, and child

> Concrete is strong, durable, waterproof, and shapeable; these

unique and useful properties make it the world’s most popular

building material

> Concrete is a key component of many familiar structures that are

essential to modern living, including homes, bridges, dams,

roads, and buildings

> Technological innovations and continuous improvement in the

cement-manufacturing process are helping us to reduce the

environmental impacts of cement and concrete production

Working to meet sustainability challengesWe are committed to identifying sustainability issues and chal-lenges and developing policies and programs to successfullyaddress them—within our industry as well as our company.We embrace our responsibility to lead our industry in itsefforts to minimize or eliminate altogether the environmentaland social impacts of its activities. And we work to improveour internal practices, from developing alternative fuels pro-grams to devising ways to help build communities andimprove their quality of life.

Our approach to sustainable development is shaped by ourparticipation in the World Business Council for SustainableDevelopment’s Cement Sustainability Initiative (CSI). Over thepast five years, we have worked in collaboration with ourindustry peers to tackle head-on the significant sustainabilitychallenges faced by the cement sector.

Our global trading operations enable us to delivercement to where it is most needed. To date, wehave established trade relations with more than60 countries.

Global markets

7

Our acquisition of RMC Group

The acquisition of RMC Group strengthens our competitiveposition in the consolidating global building-materials industry.Our greater global market access and diversification—we willnow operate in approximately 50 countries—will position us formore profitable growth and provide more stable cash-flowgeneration.

We will be better able to serve customers through strongervertical integration, our expanded global network, and a broad-er knowledge base. Our enhanced trading operations will alsoenable us to fulfill demand in more markets while utilizingexcess capacity in others. And by sharing best practices—whichwe see as a two-way process—we expect to implement newand better ways to meet our customers’ needs.

The acquisition offers greater opportunity to both our new col-leagues from RMC and continuing CEMEX employees. Ourexpanded operations open doors to new experiences, and ourculture of learning and continuous improvement offers motivat-ed employees tremendous potential for professional growth.We carry our deep commitment to our employees into our newoperations and look forward to sharing best practices to contin-ue to ensure their health, safety, and well-being.

We see significant synergies inherent in this acquisition. Forexample, we expect to yield about U.S.$200 million in annualsavings by 2007, which will come primarily from our globaltrading network and centralized management platforms andoperating systems.

We will work to incorporate our ecoefficiency programs, includ-ing our alternative-fuels programs, into our newly acquiredoperations and to implement best environmental practices fromRMC into our current operations. We are cognizant of the envi-ronmental impacts of the operations we have acquired, and welook forward to working together with our new neighbors toensure that all of our facilities and plants continue to operate ina safe and sustainable manner.

In short, we believe that this acquisition is the right one, at theright time, for CEMEX and its stakeholders.

Major changes in operations in 2004

CEMEX and RMC Group agreed that CEMEX would acquire RMC forU.S.$4.1 billion cash. The enterprise value, including the assumptionof debt, is U.S.$5.8 billion. The acquisition was completed March 1,2005.

CEMEX sold its Charlevoix and Dixon-Marquette cement plants andother associated operating assets in the Great Lakes region of theUnited States to Votorantim Participacoes S.A. at the end of the firstquarter of 2005. The transaction was structured as a sale of assetsand valued at approximately U.S.$390 million.

We acquired 13 ready-mix plants in Atlanta, Georgia, in December2004, and began building two new ready-mix plants and one newblock plant in Florida, one of which will replace an existing facility.These acquisitions and expansions broaden the company’s currentready-mix market in the southeastern United States.

Our acquisition of RMC will enhance our

growth platform and diversify our geo-

graphic base; it will strengthen our U.S.

presence, provide exposure to high-growth

markets in Eastern Europe, and give us an

important position in Western Europe’s

more mature markets.

SALES DISTRIBUTIONpercentage by product

72

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TRADING VOLUME*percentage

6040

� Cement from our operations

� Cement from third parties

* Approximately 10 million metric tons traded in 2004.

8

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Our role in creating a sustainable future begins with our philoso-phy of corporate responsibility—to run an efficient and profitablebusiness while caring for our employees, our communities, andthe environment. We believe that by following this course we canretain and develop the best talent, improve the quality of life ofour communities, protect the environment, and bring value toinvestors.

Our core values are essential to our efforts to be a more sus-tainable and responsible company:

> Collaboration: We work with our stakeholders to developprograms that meet their needs.

> Leadership: We aim to be a leader in the effort to build amore sustainable future for our company and industry, ourglobal society, and our planet.

> Integrity: We insist that all of our employees carry out theirresponsibilities in line with the highest ethical standards.

By living our core values and our sustainability philosophy, ourcompany has flourished throughout our 98-year history.

Our commitment to . . . our customersOur products shelter people and form the basic infrastructureof daily living. We help our customers address the technical,financial, and aesthetic challenges of construction by offeringan array of quality products and specialized services. We alsoexplore innovative ways of doing business—for example, devel-oping materials and programs that facilitate small contractors’work and offering lower-income families better access to build-ing materials and technical expertise. Programs like these bene-fit not only our customers but also our company, for as our cus-tomers succeed, so do we.

our investorsCEMEX pursues responsible growth through strategic acquisi-tions and the development of our markets, both of which haveenhanced our position as a global leader in the construction-materials industry. Our experience integrating new acquisitionsinto our network maximizes efficiency and the abilities of ourpeople, facilitates the sharing and implementation of best prac-tices, and, in turn, brings value to our investors. In evaluatingnew growth opportunities, the members of our board of direc-

tors and our executive team carefully weigh risks and opportu-nities in order to chart the most promising course for our com-pany’s future.

our employeesNothing is more important to our company than the health, safety,and well-being of our employees. We work to create a culture ofsafety awareness and personal wellness and to ensure that all ofour employees have access to proper health care.

We recognize the substantial intellectual and social capital thatour global workforce represents, and we strive to create an envi-ronment in which all employees can reach their full potential. Wesee the development and retention of talented employees as awin-win proposition. As our employees succeed in their lives andtheir careers, they enable our company to make a greater contri-bution to society.

our communitiesWe take very seriously our role as a good neighbor. Our pres-ence in the community creates value through direct and indi-rect economic contributions, social programs, and participationin philanthropic giving and voluntarism. By working directly withour communities, and also by selling our products, we endeavorto create conditions that will promote long-term economicprosperity and improve quality of life.

the planetWe are mindful that our business uses nonrenewable naturalresources. We have developed programs to maximize resourceuse and decrease our reliance on fossil fuels for energy. We con-tinue to invest in technologies that help to reduce the environ-mental impacts of our operations and seek new ways to bettercare for the planet’s biodiversity, air, water, and land.

Our commitment to a sustainable future

We are committed to ensuring the well-being ofour employees, protecting the environment, andcontributing to the growth of societal infrastruc-ture and the development of our communities.

10

Our commitment to sustainable development is evident in ourefforts to ensure the well-being of our employees, protect theenvironment, build societal infrastructure, and contribute to thedevelopment of our communities. These are priorities for ourcompany and are driven by our own internal policies, shaped bythe CSI Agenda for Action, and informed by our stakeholder rela-tionships. Our management framework, together with our corevalues, embodies our commitment to conduct our business withintegrity and with the highest regard for our customers, investors,employees, communities, and the environment.

Cement Sustainability Initiative: Agenda for ActionPublished in 2002, the CSI Agenda for Action establishes keymilestones for joint industry projects to reduce the cement sec-tor’s ecological footprint, increase stakeholder engagement, andcontribute to social development. The document also providesguidelines for individual corporate action, as each participant isresponsible for setting company-specific performance goals andtargets. The next CSI progress report, detailing work conducted bythe CSI task forces, is expected to be published in June 2005.

The CSI has established the following priorities:> Climate protection> Fuels and raw-materials use> Employee health and safety> Emissions reduction> Local impacts> Reporting and communication with

external audiences

We are proud to chair the CSI Employee Health and Safety TaskForce, which issued a draft report in October 2004 entitled“Safety in the Cement Industry: Guidelines for Measuring andReporting.” The report

> establishes common and consistent reporting standards foremployee health and safety statistics;

> outlines a process for tracking baseline safety performanceacross the cement industry; and

> encourages transparent reporting of safety information andperformance.

CEMEX will continue to be an active participant in the CSI, apply-ing the learning, best practices, and stakeholder input flowingfrom the initiative to the company’s operations around the world.

Our EHS policy and steering committeeOur EHS policy, established in 1994 and refined throughout thepast ten years, is the foundation of our strategy for a sustain-able CEMEX. The policy requires that we, at a minimum, complywith all laws, regulations, and voluntary agreements relating tomatters of environment, health, and safety in each businessunit. We must also

> employ the most advanced technology to ensure efficiencyand the optimal use of raw materials;

> promote a culture of environmental awareness, personalwellness, and safety within our plants, facilities, and com-munities; and

> use the most effective systems and equipment to protect ourpeople, our neighboring communities, and the environment.

Our EHS steering committee develops our overall strategy forsustainable development, obtains the necessary corporate sup-port for its initiatives, and evaluates the effectiveness of thesemeasures. The EHS steering committee chair, currently held bythe president of our South America and Caribbean region,rotates annually.

The nine members of our EHS steering committee, all top CEMEXexecutives, meet regularly to discuss the implementation of ourEHS policy. The committee also communicates EHS best practicesto all areas of our global operations. Business unit managers arecharged with implementing EHS policy and reporting back to thesteering committee on their units’ performance.

Putting accountability into practiceWe work hard to maintain the highest standards of corporategovernance and accountability to our stakeholders. We haveimplemented measures throughout our organization to ensurethe integrity of our operations and decision-making processes,from the plant floor to the boardroom.

Managing for sustainability

Our employees play a vital role inensuring the integrity of our opera-tions by voicing their concerns aboutour business practices and financialreporting methods.

11Stakeholder engagement

We value the stakeholder relationships we have built over the years.They are a rich source of information and insight that we can con-structively apply to making CEMEX an ever-stronger business. Welisten to our stakeholders and work to maintain channels of commu-nication that promote open and honest dialogue.

CustomersWe conduct customer surveys in most of our major markets tounderstand what we are doing well and where we can better serveour customers’ needs.

InvestorsWe communicate with our stockholders and their representativeson a regular basis through our annual reports, quarterly earningsand guidance releases, conference calls, and personal interaction.We aim to keep our investors fully and fairly informed of our activi-ties and to ensure that our financial disclosure not only complieswith all laws and regulations but also meets the highest ethical stan-dards.

EmployeesWe foster a work culture that is open and responsive to employeefeedback. We measure employee satisfaction through internal sur-veys and encourage employees to submit their ideas as to how wecan improve our operations.

CommunitiesWe engage with our communities on multiple levels, from negotiat-ing new plant openings to supporting local cultural initiatives andeconomic development programs. The community-relations coordi-nators at our plants ensure that we listen and respond to communityconcerns.

SuppliersOur suppliers know that they can reach us at any time with theirconcerns or suggestions, either through direct contact with theirsupplier representatives or through our dedicated supplier website.

Governments and regulatorsMany of our activities are subject to local, state, and federal regula-tions, requiring regular communication with government representa-tives to ensure that we maintain full compliance, fulfill mandatoryreporting requirements, and are available to clarify and resolve anyissues.

board of directorsCEMEX’s Board of Directors is responsible for supervising theoverall operation of our company. Chaired by our CEO LorenzoH. Zambrano, the Board consists of 12 directors and 3 alternatedirectors; 5 of our directors and 1 of our alternate directors areindependent. The audit committee established by the Board hasfive members, four of whom are independent. Our articles andbylaws require at least three of the members of the audit com-mittee, including its president, to be independent directors. Theaudit committee is responsible for the appointment, compensa-tion, and oversight of our auditors and the review of related-party transactions. It also establishes procedures for handlingcomplaints regarding accounting or internal-control matters,including confidential methods for addressing concerns raisedby employees. Each year, the audit committee submits a reportof its activities to the Board.

executive compensationTo better align the interests of our executives with those of ourstockholders, we established an employee stock-option plan in1995. In early 2004 we offered to exchange our executives’options for new options that can be exercised into restrictedstock instead of cash, and in the fourth quarter we offered ourexecutives an early-exercise program to accelerate the transi-tion to restricted stock. In 2005 we will offer a new executivestock-ownership plan designed to move our company’s long-term incentives from stock options to programs based onrestricted stock. We have also established for our executives avariable compensation plan that distributes a bonus poolbased on actual business results.

protecting confidentiality, preserving trustAll employees and suppliers must sign an agreement acceptingresponsibility for the proper use of confidential information. Theconfidentiality agreement, the letter confirming adherence to ourcode of ethics, and our insider trading policy all expressly prohibitemployees and all persons who receive or have access to confi-dential information from using that information for personal gain.

CHIEF EXECUTIVE OFFICER

President of the

North America

Region & Trading

President of the

South America

& Caribbean

Region

President of the

Europe Region

President of the

Iberia, Middle

East, Africa & Asia

Region

Chief Financial

Officer

Executive VP of

Planning and

Finance

Executive VP of

Development

Executive VP of

Administration

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the Sarbanes-Oxley Act of 2002As a non-U.S. company whose securities are traded on a U.S.securities exchange, CEMEX is subject to the Sarbanes-Oxley Actof 2002 (SOX). To ensure compliance with SOX and all applicableregulations, we have implemented confidential and anonymouswhistle-blowing procedures and have established a disclosurecommittee and an internal process for certifying public disclo-sures. To coordinate these efforts, we have assembled an internaltask force whose members work in the internal control, legal, andfinance departments. In addition to our independent audit com-mittee, established in 2002, and our code of ethics, establishedwell before SOX was passed, we have taken the following stepsto ensure our compliance with SOX1:

> As of 2003, our CEO and our executive vice president of plan-ning and finance have been certifying in our Form 20-F annualreport that no material untrue statements are made and nomaterial omissions exist.

> We are working diligently to ensure that our management willbe able to attest to the effectiveness of the company’s inter-nal control over financial reporting as required by section 404of SOX.

We have also developed an internal certification systemby which all senior executives responsible for provid-ing information for public disclosure certify theaccuracy of the information and that no material

omissions exist. Although not required by SOX,this system assists the CEO and CFO in their

certification process and, we believe, helps toensure compliance.

For a more detailed description of thesemeasures, please visit our website.

Our code of ethics

Our code of business conduct and ethics ensures thatour employees adhere to a uniform standard of conductin performing their business activities. The code governs

> our stakeholder relationships> workplace safety and health> environmental stewardship> conflicts of interest> political contributions> avoidance of corruption> treatment of confidential information> procedures regarding financial controls and preserva-

tion of assets

We periodically evaluate the code and update provisionsto reflect changes in laws or societal norms. In 2004 werevised the code to clarify and strengthen certain of itsprovisions and to ensure compliance with the Sarbanes-Oxley Act of 2002. A copy of our code of ethics can befound on our website.

We ensure awareness and enforcement of thecode through our country- and corporate-level ethics committees and training andinternal communications programs. All ofour employees receive a copy of thecode and must sign a letter stating thatthey have read and understood it andwill abide by its provisions. We haveestablished confidential channels foralerting our ethics committee and sen-ior managers to any suspected viola-tions of the code, including securewebsites that employees can use toprovide information anonymously. Wedo not tolerate retaliation for reports orcomplaints made in good faith.

Organizational chart*

* As of March 1, 2005.

1We are in compliance with the required sec-tions of SOX and expect to be in compliancewith section 404. All foreign private issuers inthe United States must comply with Section404 for their fiscal years ending on or after July15, 2006.

13

responding to employee concernsBy voicing their comments and concerns about our businesspractices and financial reporting methods, our employees play avital role in ensuring the integrity of our operations.

With regard to financial reporting, employees may submit—anonymously if they wish—complaints or concerns aboutaccounting and auditing matters through a secure internet siteor by phone, mail, or email. Upon receipt of an employee’s com-ments, our financial expert, who is an independent voting mem-ber of our Board of Directors’ audit committee, reviews thecomments and presents a report to the entire audit committee.The audit committee then determines the appropriate action.This process complies with the requirements of SOX.

For complaints or concerns regarding damage to CEMEX’sassets or any other matter related to our business processes,employees may contact our internal audit department througha secure external website or by telephone, mail, or email.Messages sent through the website may be submitted anony-mously, and all communications are handled confidentially. Ourvice president of process assessment (internal audit) reviews allmessages sent through the site and submits a report to man-agement, which determines the appropriate action.

A global partnership to reduce risk

In 1997 we began collaborating with FM Global, one of the world’sbest-known property insurers, to improve CEMEX’s risk profile. FMGlobal helped us design a long-term master loss-prevention plan,the implementation of which has enabled 50 of our 54 cement plantsto achieve FM Global’s Highly Protected Risk (HPR) designation.

As we expand our operations worldwide, our collaboration withFM Global allows us to maintain consistency and transparency inour loss-prevention efforts. When we announced in 2004 ourplanned acquisition of RMC, we began coordinating with FMGlobal to initiate loss-prevention seminars at all of our locations, tobe taught in each facility’s local language.

Internal control and process assessmentWe are constantly seeking new ways to mitigate risk and protectcompany assets. Through our system of internal controls weassess risk and measure and strengthen the performance of all ofour business and operating processes. Our internal control depart-ment supports management by designing internal controls, byassuring their existence and effectiveness, and by supervising theimplementation of measures to mitigate risks. Internal control alsomanages compliance with section 404 of SOX.

Our internal audit, or process assessment, department inde-pendently tests the integrity of our internal control system inorder to provide reasonable assurance to stockholders, thefinancial community, and other interested parties that (1) weexecute transactions in accordance with management authori-zation, (2) our records form a reliable basis for the preparationof financial statements, and (3) we safeguard our assets againstloss by unauthorized use or disposition. Through PACS (ProcessAssessment Certification System)—our proprietary testing, veri-fication, and grading system—process assessment works tostrengthen management and promote integrity and operatingefficiency in all of our organizational processes. This departmentalso identifies best practices in each country and shares themthroughout the company twice each year.

14

15

A strong and growing organization

Our business model—with its focus on efficient and profitablegrowth—has enabled our company to become a global com-petitor in a consolidating industry. Because we have diversifiedour portfolio mainly in dynamic markets with long-term growthpotential and often complementary economic cycles, we areable to generate stable cash flow throughout the businesscycle.

A financially disciplined organizationOur financial discipline is reflected in our solid balance sheetand investment-grade credit ratings. Because of our sound capi-tal structure and ability to effectively allocate capital, we canmake acquisitions that meet our strict investment criteria whilemaintaining our financial flexibility. Since we acquired South-down in the United States in 2000, for example, we have steadi-ly improved our interest coverage—to 6.8 times at the end of2004 from 4.1 times for 2000. And with our acquisition of RMC,completed on March 1, 2005, we expect to be able to maintainour interest coverage at over five times throughout 2005 and toreach our target net-debt-to-EBITDA ratio of 2.7 times by theend of 2005.

Capitalizing on growth potential in our marketsWe continue to see significant potential for the use of our prod-ucts in both developing and developed markets. In California, forexample, we are partnering with customers to increase concreteuse in parking, commercial, residential, and road construction. Asa result of our efforts, we have secured several projects andexceeded our expectations for total EBITDA contribution in 2004.At the same time, we have raised our profile as a resource forconcrete and cement among engineering, architectural, anddevelopment professionals. Through our Catedra Blanca andCatedra CEMEX España programs in Spain, we teach the theoreti-cal and practical applications of our white cement, as well asother cement products, to students of the building professions.These programs, held at universities in Barcelona, Madrid, andValencia, are led by an interdisciplinary team of experts, includingarchitecture professors and CEMEX research and technologyspecialists.

Our commitment to continuous improvementstrengthening our supply chain, streamlining ourprocurement processIn 2004 we began an intensive program to streamline our pro-curement process by consolidating our global negotiations andseparating them from our purchasing activities, reinforcing plan-ning, and standardizing the goods that we purchase. As a result,we have dramatically improved the efficiency of this processand the consistency and quality of our products and services.We have reduced working capital by more than 60%, or aroundU.S.$150 million, through inventory optimization and better pric-ing and other terms. And we are strengthening relationshipswith suppliers and other areas of our operations.

seamlessly integrating acquisitionsOur process for integrating acquisitions into the CEMEX networkbrings our company and our stakeholders significant benefits.Well before completing an acquisition, we assemble a multina-tional, multicultural team of professionals—from accountants toengineers to efficiency experts. This team analyzes the new oper-ation and identifies synergies, talent, best practices, and opportu-nities for improvement. This information allows us to quickly inte-grate the acquisition, cultivate strong relationships with our newemployees, and assure continuity of service to customers. Wealso share and implement best practices—ours as well as thoseof the new operation—throughout the expanded organization.

1

2

3

4

5

6

7

94 95 96 97 98 99 00 01 02 03 04

2.2

6.8

FINANCIAL INDICATORStimes

Our financial discipline enables us to quickly recoverour financial flexibility following an acquisition.

Interest coverageNet debt to EBITDA

We have a strong presence, and see robustgrowth potential for our products, in bothdeveloping and developed markets.

16

Over the years we have dramatically improved the speed andefficiency with which we integrate acquisitions. For example, weintegrated our 1992 acquisitions in Spain, which added annualcapacity of 11.5 million metric tons, over a period of two years;in 2000 we integrated Southdown, which added annual capacityof 11 million metric tons, in four months. We expect to fully real-ize the synergies from the RMC integration—including cost sav-ings of U.S.$200 million a year and a return on capital employedof 10%—by 2007.

ensuring product qualityWe make products of consistently high quality by investing inadvanced technologies to optimize production processes and pre-cisely measure and control our output. Our standardized, automat-ed information-management platforms enable us to analyze qualitydata from all of our plants and quickly implement global quality-management decisions. On the procurement side, we work withonly those suppliers who can meet our high quality standards.

Our quality-management systems are based on the ISO 9001standard. All of our cement plants in Colombia, Costa Rica, theDominican Republic, Egypt, Mexico, Panama, the Philippines,Spain, and Venezuela are ISO 9001 certified. In the United Statesour audit system incorporates the highest quality-managementstandards. Our quality-control managers continually seek out andshare best practices throughout our organization.

rewarding good ideas: Your Opinion CountsFor the third year in a row, our U.S. operations conducted theYour Opinion Counts campaign, a program designed to fosterinnovation and knowledge transfer. Employees are encouragedto submit suggestions for improving all aspects of our opera-tions, from customer service to internal communication. In 2004we received more than 800 ideas from all over the country. Thethree best ideas will be announced and recognized at the 2005annual employee meeting. Among the winning ideas in pastyears were proposals to improve customer service, promoteteamwork, and reduce costs.

Strengthening customer relationshipscustomer relationship managementOur comprehensive customer relationship management (CRM)platform utilizes the following standardized service initiatives,which enable us to keep our promises and save clients timeand money:

> Customer service center, a call center that enables us to quicklyand effectively respond to our customers’ cement orders,inquiries, complaints, and suggestions and monitor our cus-tomer commitments

> Demand fulfillment, which ensures on-time delivery of our prod-ucts and seamless, automatic inventory management

> Value-added tools such as internet and mobile-phone portals forhandling customer inquiries, orders, and payments

This system has been fully implemented in most of our opera-tions. In 2004 average electronic CRM interactions increased to 22per client per month from 12 in 2003, and 22% of our total cementvolume was ordered online. As part of our continuous improve-ment effort, our next step is to use what we have learned throughour CRM interactions to further benefit our clients and strengthenour relationships.

creating opportunity for our customers: Construramaand ConstrucardThrough Construrama, our retail network, we partner with ourdistributors to offer customers an entire line of building materi-als, from plumbing and electrical supplies to paint, lumber, andlighting fixtures. Begun in Mexico in 2001, we have expandedthis initiative to South America; there are now 98 Construrama

Financial highlights in miilions of US dollars,1 except per-ADR data 2004 2003 change

Net sales 8,149 7,164 14%

Operating income 1,852 1,455 27%

EBITDA 2,538 2,108 20%

Consolidated net income 1,328 659 101%

Earnings per ADR2 3.93 1.99 97%

Free cash flow 1,478 1,143 29%

Total assets 17,381 16,016 9%

Net debt3 5,588 5,641 (1%)

Stockholders’ equity, majority interest 7,831 6,234 26%1For your convenience, US dollar amounts are calculated by converting the constant Mexican peso amounts at the end of the year using the end-of-year Mexican peso/US dollar exchange rate for each year. Theexchange rates used to convert results for 2003 and 2004 are 11.24 and 11.14 Mexican pesos per US dollar, respectively.2Based on an average of 332.9 and 315.2 million American depository receipts (ADRs) for 2004 and 2003, respectively.3Net debt for 2004 includes the acquisition of 50 million RMC shares representing approximately 18.8% of the issued share capital of RMC.

Our ready-mix operations platform uses advancedtechnology to guarantee on-time delivery andcontrol the quality of our products. This platformreduces waste and helps keep customers’ projectson track and on budget.

17

stores in Venezuela and more than 2,100 across Mexico. Wealso train our distributors in Mexico and Venezuela to manageall aspects of their business—including inventory control, prod-uct promotion, sales-force training, and transportation logistics.

In 2004 we partnered with GE Capital Bank to launchConstrucard, a construction-financing initiative designed for ourdo-it-yourself customers. Available through Construrama distribu-tors in 57 Mexican cities, Construcard allows cardholders to pur-chase any item sold through Construrama—in some stores, cus-tomers can choose from around 40,000 items. Applicants—mostoccupy the base of the economic pyramid and have very limitedfinancing options—need not provide collateral to obtain aConstrucard. Thus, these individuals can use the card, which hasan average credit line of U.S.$1,000, to finance home remodelingor, over time, the construction of an entire home. As an example,in Mexico U.S.$1,000 will buy enough materials to add a nine-square-meter room to a customer's house.

As of the end of 2004, we had issued more than 80,000 Cons-trucards, which are accepted at more than 700 Construramastores in Mexico. In its first year, Construcard sales reachedapproximately U.S.$15 million.

helping small businesses to help themselvesBecause we believe that our customers’ success is our success,we have begun a pilot program to work with small contractors—who usually employ ten or fewer people—to help them bettermanage their businesses. We offer revolving credit lines of up toU.S.$100,000 to enable them to purchase materials, optimize theirworking capital, and better manage cash flow.

In Panama we have formed a strategic alliance with the CámaraPanameña de la Construcción, Panama’s construction chamberof commerce, to assess the skills-training needs of areamasons; this diagnostic tool will serve as the basis for a devel-opment program for the masonry profession financed by theInter-American Development Bank.

Communicating with our customers

The following are only a few examples of how we com-municate with our customers.

In Bangladesh we conduct customer surveys to gaugesatisfaction. When a customer registers a complaint, welog it, analyze the cause, work immediately to resolve theissue to the customer’s satisfaction, and follow up toensure that the issue has been resolved.

In 2004 sales managers for our APO and Solid cementplants in the Philippines solicited feedback through a cus-tomer-satisfaction survey. The results: very high levels ofsatisfaction with the quality, availability, and reliability ofour cement and moderately high levels of satisfactionwith regard to cement pricing.

In Colombia our new publication, Manos a la Obra (LetsGet to Work), communicates to clients different CEMEXinitiatives to help meet their needs and enables them toexpress their ideas and concerns. We distributed 4,000copies of the first issue in December 2004.

With 98 new stores opened in 2004, Construramais already Venezuela’s largest building-materialsnetwork.

We now provide building molds for smallercontractors, which enable them to build homesmore quickly and at lower cost to them and theircustomers.

18

Environmental stewardship is an integral part of our businessstrategy. By operating as efficiently as possible, we conserveenergy and natural resources and reduce waste and emis-sions—actions that benefit the environment as well as our bot-tom line. We constantly seek out new opportunities to improveour environmental performance by sharing best practicesacross our global network of plants and facilities. And we col-laborate with our communities and industry peers to createjoint solutions to environmental challenges.

The cornerstone of our commitment to the environment is ourenvironmental, health, and safety (EHS) policy. We have appointedcountry- and facility-level EHS coordinators to implement pro-grams and initiatives to meet policy objectives. As CEMEXexpands its operations, our EHS coordinators ensure the appli-cation of our EHS policy at our new locations.

Environmental management systemsMany of our cement plants worldwide, including all plants inEgypt, Mexico, the Philippines, Spain, and Venezuela, are certifiedto the ISO 14001 standard, and our Panama and Costa Rica plantsare scheduled to be certified in 2005. Each of our locations has alocally certified environmental management system.

We conduct internal and external audits to ensure compliance withenvironmental standards—ours as well as those of the locales inwhich we are operating. For example, our Philippine quarries areinspected quarterly by a monitoring team composed of represen-tatives from the federal environmental agency, local governmentunits and NGOs, and CEMEX facility directors and EHS managers.

EcoefficiencyFor more than ten years, our ecoefficiency program has helpedus to reduce the environmental impact of our operations. Wehave implemented innovative processes to effectively utilizenatural resources, and we invest in new technologies toimprove plant environmental performance. We expect thatthese investments will not only reduce our environmental foot-print but also increase long-term business value.

energy use, air emissions, and climate protectionCement production is an energy-intensive process that resultsin the release of greenhouse gases (GHGs)—primarily carbondioxide (CO2)—into the atmosphere. Our main sources of CO2emissions are our calcination process, the burning of fossilfuels in our plants, and the transportation of our products. Wedeveloped a corporate strategy to manage these impacts in1997 and have instituted CO2-reduction programs throughoutour global operations, including initiatives to optimize energy,use alternative fuels, and reduce clinker usage. We are contin-ually updating our CO2 emissions inventory and climate-changemitigation strategy in accordance with the CSI Agenda forAction.

We are also working to improve air quality around our plants.We utilize advanced control technologies such as high-efficien-cy burners to minimize emissions of sulfur oxides (SOx), nitro-gen oxides (NOx), carbon monoxide (CO), and particulate mat-ter (dust).

> The Termoeléctrica del Golfo (TEG) power plant in Mexicobegan operations in 2004. TEG will supply over 60% of theenergy used at our plants in Mexico under a 20-year power-supply agreement and will utilize pet coke as fuel. TEG’sstate-of-the-art, circulating-fluidized-bed technology results ina very high SOx capture rate, which reduces sulfur emissionscompared with those of a conventional fuel-oil power plant.

Our commitment to the environment

In November 2004 CEMEX Nicaragua received theSemper Virens award from Nicaragua’s ministeryof the environment and natural resources. Theaward recognizes companies that use the mosteffective processes and technologies to controlpollution and protect the environment.

20

Lower operating temperatures also result in NOx emissionsthat are much lower than those of a conventional coal orfuel-oil plant.

> In Nicaragua our partnership with the national office of cleandevelopment explores clean development mechanism(CDM) projects as specified under the Kyoto Protocol.

> CEMEX Mexico is participating in a pilot project administeredby SEMARNAT (Mexico’s secretariat for the environment andnatural resources) to help establish a voluntary national pro-gram to promote the measurement and reporting of GHGemissions by Mexican businesses. The program will bebased on the GHG Protocol developed by the WorldResources Institute and the World Business Council forSustainable Development.

> As members of Oficemen, Spain’s association of cementmakers, we have signed an agreement with the majornational labor unions to help advance the sustainable devel-opment of the cement industry. The agreement calls for thereduction and control of air emissions and establishes pro-cedures for utilizing residual materials as fuel.

> At several of our U.S. plants we have tested and imple-mented an innovative approach that minimizes NOx emis-sions by injecting small quantities of water into the kilncombustion flame. This procedure yields up to a 30% reduc-tion in NOx emissions.

alternative fuelsIn order to reduce our energy costs and environmental impacts,including CO2 emissions and solid wastes, we seek alternativesto traditional fossil fuels—oil, coal, and natural gas. We havefound that substitutes such as spent oil and solvents, biomass,used tires, and solid waste can be burned in our kilns to producehigh-quality cement. We are working to give all of our cementplants the flexibility to use nontraditional fuels.

alternative raw materialsWe lower energy consumption and reduce our reliance on vir-gin raw materials by using alternative materials such as fly ash,pozzolana, slag, and synthetic gypsum to produce cement. Ouroperations vary in the amounts of alternative materials they canuse. For example, these materials replace as much as 18% ofthe total clinker used in our Costa Rica plant, 6% in our U.S.plants, and about 6% in our plant in the Dominican Republic. InNicaragua we have reduced both clinker use and energy con-sumption by capturing and reusing waste dust in our cement-production process. In Mexico we received a Best Practicesaward from CEMEFI (the Mexican Center for Philanthropy) inrecognition of our alternative raw-materials programs.

land stewardshipWe obtain the raw materials for our products from quarries thatwe either own or lease. We establish in many of our operationsbiodiversity-management and land-rehabilitation plans to mini-mize the impacts of our extraction activities. These programsfacilitate the transition from quarry to functioning ecosystemfollowing a quarry’s closure.

For example, the rehabilitation plan at our Marena quarry inNicaragua calls for the development of a lake area that will pro-vide a habitat for indigenous fish, amphibians, and mammalspecies. At our Fairborn plant in the United States, we haveincorporated buffer zones around stream banks and wetlandareas at a new quarry site; these areas, over which we haveobtained a conservation easement, will be planted with nativevegetation. In Spain we have transformed a spent quarry byplanting more than 92,000 grape vines on 26 hectares of land.And through our reforestation program in Venezuela, now in itsfifth year, we have reforested four quarries covering more than36 hectares of land with 38,800 plants.

We use advanced control technologies suchas high-efficiency burners to minimize airemissions.

We employ the most advanced technology toensure efficiency and optimal use of raw materials.

21

90 02 90 02 90 02

39.84

33.19

04

43.2754.96

41.90

04

58.04

725

792

04

745

SPECIFIC EMISSIONSkg CO2/metric ton ofcement

CEMENT PRODUCTIONmillion metric tons ofcement

GROSS CO2 EMISSIONSmillion metric tons

We employ the most advanced technology toensure efficiency and the optimal use of rawmaterials.

TOTAL FUEL DISTRIBUTIONpercentage of energy

ALTERNATIVE FUEL DISTRIBUTIONpercentage of energy

48

27

11

122

18

2548

9

� Pet coke

� Coal

� Fuel oil

� Gas

� Alternative

� Biomass

� Spent oils

� Solid waste

� Used tires

We constantly seek new opportunities to

improve our environmental performance by

sharing best practices across our global

network of plants and facilities.

00 01 02 03 04

8584848685

CLINKER FACTOR IN CEMENTpercentage clinker content

The increase in our gross and specific CO2emissions in 2004 resulted from

> the acquisition of Dixon-Marquette inthe United States, completed at the endof 2002

> increased use of pet coke

> reactivation of lower-efficiency kilnsdue to high demand

We are taking measures to offset theincrease in CO2 emissions, such as usingalternative fuels and raw materials,increasing additives in the cement-makingprocess, and optimizing energy use.

22

El Carmen conservation initiativeOne of our most successful initiatives is the El Carmen conserva-tion area in northern Coahuila, Mexico. In partnership with Agrupa-ción Sierra Madre, a Mexico-based NGO, and others, we are work-ing to preserve this unique ecosystem and the hundreds of plant,bird, mammal, reptile, and amphibian species that depend on it forsurvival. El Carmen covers a total area of 75,000 hectares and ispart of one of the largest and most biodiverse transfrontier con-servation areas in North America.

Promoting positive environmental actionThe environmental impacts related to our operations neitherbegin nor end at our facility gates. We realize that we influencethe actions of our employees when they leave work, the abilityof our customers to purchase sustainable products, the com-munities in which we operate, and the performance of our sup-pliers. Through our environmental policies and practices weseek to foster greater environmental awareness among all ofour stakeholders so that, together, we can protect and preservenatural resources.

community involvementIn many locations we have established panels composed ofcommunity representatives and CEMEX plant employees toidentify and address environmental and other relevant issues.For example, at Colombia’s La Fiscala aggregates plant, we heldmeetings with community members and representatives of thenational, regional, and district governments to discuss environ-

mental and related technical, legal, and economic concerns. Inthe United States, we initiated a community benchmarking proj-ect in 2004 to understand local perceptions of our plants’ envi-ronmental compliance status, philanthropic initiatives, and over-all reputation as a good neighbor. We will follow up this initiativeby developing community investment plans for each U.S.cement plant by mid-2005.

customer supportAs environmental laws become more stringent, we find that ourcustomers are turning to us for assistance and advice in com-plying with regulations. In Mexico we have been working withhousing developers to help them navigate the permit processand better communicate with environmental NGOs. In thePhilippines we initiated a cement products ecolabeling programin collaboration with the NGOs Green Choice and ConcernedCitizens Against Pollution.

raising awarenessSince 1993 we have promoted public understanding of andsupport for biodiversity preservation through the annual publi-cation of conservation books. The books are developed inpartnership with leading NGOs involved in biodiversity issues,including Conservation International and Agrupación SierraMadre. We distribute these books to universities, governmentagencies, and research institutions to support their fundraisingefforts.

We have implemented innovative processes

to effectively utilize natural resources, and

we invest in new technologies to improve

plant environmental performance.

USED TIRES SPENT OILS LIQUID WASTE SOLID WASTE BIOMASS

Colombia � �

Costa Rica � �

Dominican Republic � � � �

Mexico � � � �

Nicaragua � �

Panama � �

Philippines � �

Spain � �

Thailand �

United States �

Venezuela � �

Alternative fuels use

� in use � testing or pending approval

23

We also fund and participate in numerous environmental edu-cation programs for both children and adults. Our PaintNature competition in the Dominican Republic attracted 500entries from more than 100 educational centers. In Nicaraguawe sponsored a Young Environmentalist program and, inMexico, partnered with CONAFOR (the national forest com-mission) to present environmental lectures to the communi-ties surrounding our plants. In Spain we are collaborating withmunicipal governments to bring to their cities an exhibitioncalled Face to Face with the Extinction Crisis, based on one ofour environmental books. In Puerto Rico we continue ourpartnership with Fideicomiso de Conservación, a conserva-tion trust, to reforest areas surrounding island schools. Nowon its fifth year, the program trains hundreds of students intree cultivation, using the model forest on our site as anexample, and gives them trees to plant near their schools.

Environmental awards in 2004

Costa Rica: the Bandera Ecológica environ-mental program of the Ministereo del Ambientey Energía, the country’s ministry of the environ-ment and energy, which recognizes companiesthat install and maintain environmental manage-ment programs, certified our Patarrá andColorado plants.

Mexico: CEMEX Mexico’s alternative raw-mate-rials program received a Best Practices Awardfrom Centro Mexicano para la Filantropía (CEMEFI).

Nicaragua: Nicaragua’s ministery of the envi-ronment and natural resources presentedCEMEX Nicaragua the Semper Virens award,which recognizes companies that use the mosteffective processes and technologies to controlpollution and protect the environment.

Panama: Panama’s national environmentalauthority and CONEP, the National council of pri-vate enterprise, presented the Clean Productionaward to our Cemento Bayano plant for thecleanest production in the following categories:Technological Innovation in Clean Production, forour alternative fuels project, and Best Implemen-tation of Cleaner Production in Large Companies,for our dust collector filter installation.

Spain: The “Good Image in Quarries and GravelMines” prize awarded by ANEFA, the nationalassociation of aggregates producers, to theLlimpet quarry in Minorca.

Venezuela: the Chamber of Commerce andIndustry in the city of Caroni recognized ourGuyana plant as the company with the bestenvironmental performance.

Hotspots Revisited, the twelfth in our series of conservation books,features the results of a second in-depth analysis of global hotspots, awidely used prioritization strategy for allocating conservation dollars towhere they will have the greatest impact. According to the new analy-sis, an estimated 50% of the world’s vascular plants and 42% of ter-restrial vertebrates exist in only 34 hotspots.

2424

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Social performance

Employee health and safetyOur commitment to our employees begins with a culture ofsafety, embodied in our slogan: “Just one day without accidents. . . Today.” Each day gives us a new opportunity to improveworkplace safety and to prevent accidents. By focusing on safe-ty as a way of life, we not only ensure the highest possible lev-els of employee health and wellness; we also maintain highmorale and productivity.

All of our plants and facilities are responsible for implementingprograms to address the fourteen issue areas covered by ourglobal safety management system. These areas include safetytraining, emergency preparation, health-risk analysis, accidentinvestigation, and process risk management. A key part of oursafety management system is SISTER, our electronic monitoringand tracking platform, which allows plant supervisors to accessreal-time accident data, share best practices, and alert othermanagers to potential safety concerns.

our performance in 2004Our unwavering focus on safety has enabled us to improve ouroverall safety performance in 2004, for the eighth consecutiveyear. We reduced our overall accident rate to 1.46% from our2003 rate of 1.60%. This reduction is attributable in large part toour concrete sector’s excellent safety results. In 2004, 12cement plants and 15 concrete clusters achieved a perfectsafety record of zero accidents. We recognize the leadership ofthese facilities and the dedication of all of our employees inbringing us closer to our safety goals.

Although we are proud of these achievements, it is with deepregret that we report the deaths of 10 people—two employees,five contractors, and three third parties—in connection with ouroperations. Any work-related death is unacceptable, and we areworking tirelessly to apply our safety training and awareness ini-tiatives to bring the number of workplace fatalities—as well asall accidents—to zero. One key initiative that we are implement-ing is a method to report, track, and analyze “near-misses”—those incidents that did not result in injuries but could have.

Sharing the industry’s best health and safety practices

CEMEX heads the Cement Sustainability Initiative’sEmployee Health and Safety Task Force (TF3), which com-prises individuals from the CSI’s twelve member organiza-tions. Through their efforts TF3 has published a compila-tion of industry best practices entitled Health & Safety inthe Cement Industry: Examples of Good Practice. This toolkit provides practical advice on good safety practices,focusing on identifying and eliminating the causes ofinjuries and fatalities in the industry. It also providesguidelines for employee health and concentrates on con-cerns common to the industry—for example, those relat-ed to alternative fuel use.

This publication is one example of how CSI memberorganizations are sharing experiences and expertise toimprove health and safety performance across the entirecement industry.

Our commitment to our employees begins with aculture of safety, embodied in our slogan: “Justone day without accidents . . . Today.”

This chart represents our overall accident ratefor directly employed individuals in all CEMEXoperations.

00 01 02 03 04

1.461.601.65

1.74

2.27

CONSOLIDATED ACCIDENT RATE2000–2004

26

Our ultimate safety goal is zero accidents, zero fatalities. Wehave established the following safety objectives for 2005:

> Implement risk-prevention programs in the concrete sector,especially in the area of driver training and certification

> Work to ensure that safety-performance improvements in thecement sector are made permanent

> Continue to pursue certification of our plants and facilities tothe OHSAS 18001 standard

> Strive to reduce the average severity rate of our lost-timeinjuries by improving injury diagnosis, providing individualizedmedical evaluations to injured employees, and coordinatingtreatment and rehabilitation to facilitate more rapid recoveryand reintegration into the workforce

safety training and awarenessWe have made significant investments to ensure that ouremployees have the knowledge and tools to assure their ownsafety and that of their coworkers. We provide employees withprotective equipment and rigorous instruction using the mostadvanced training technology. New employees undergo initialsafety instruction, and all employees regularly attend refreshercourses.

We reinforce employee training through weekly and monthlysafety meetings. We use both formal and informal communica-tion pathways to emphasize safety issues and institutionalizeproper workplace procedures. We also conduct safety auditsand risk assessments to determine where to focus our efforts.For example, each of our cement plants in Mexico has a desig-nated safety assessor who is responsible for coordinating safetytraining, conducting risk assessments, and organizing safetyeducation programs. In Thailand an 11-member safety commit-tee composed of managers, coordinators, and supervisors over-sees all workplace safety matters.

We also promote safety across our organization through theCEMEX Safety Awards. In 2004 our plants in Spain, Mexico, theUnited States, Colombia, and Costa Rica achieved top honors.

Employee health and wellnessOur employees’ quality of life depends not only on a safe workenvironment but also on each individual’s ability to manage his orher overall health and well-being. We have developed comprehen-

This chart represents the total number of lost-timeinjuries for directly employed individuals in allCEMEX operations.

00 01 02 03 04

386414

438451

506

TOTAL LOST-TIME INJURIES2000–2004

CEMEX consolidated accident indicators 2004 2003 2002 2001 2000

Accident rate 1.46 1.60 1.65 1.74 2.27

Lost-time injuries: directly employed1 386 414 438 451 506

Lost-time Injuries: indirectly employed2 25 35 44 53 N/A

Fatalities: directly employed 2 7 4 6 10

Fatalities: indirectly employed 5 4 12 1 2

Fatalities: third parties3 3 1 4 3 4

Fatality rate per 10,000 directly employed 0.8 2.7 1.5 2.3 4.5

Injury frequency rate (per 1,000,000

man-hours worked): directly employed 7.3 8.0 8.3 8.7 11.3

Average severity rate4 41.5 43.1 41.8 29.6 30.1

We are proud to recognize the more than 5,000employees of our South America and Caribbeanoperations for achieving a record low accidentrate of 0.91—down from 1.58 in 2003—while pro-ducing more than 10 million metric tons ofcement and more than 3 million cubic meters ofready-mix concrete. This safety rate sets a newbenchmark of performance excellence and chal-lenges us to maintain our focus on accident andrisk reduction across all our operations.

1CEMEX employees. 2Indirectly employed individuals include contractors and subcontractors. 3Third parties are individuals who are neither directly nor indirectly employed by CEMEX.4The result obtained by dividing the number of work days by the number of lost-time injuries.

27

sive health-awareness and preventive-care programs that helpour people address physical, environmental, and behavioral fac-tors that could lead to sickness or injury. We encourage employ-ees to take advantage of on-site educational seminars on topicssuch as stress management, nutrition, and ergonomics.

We offer preventive health exams that screen for cardiovascular,respiratory, vision, and other physical risks. In Colombia, for exam-ple, 350 employees from our 4 cement and 18 ready-mix plantsparticipated in health check-ups. In the Philippines we monitoremployees with chronic health issues such as high blood pressureand diabetes to ensure that they receive proper medical care. InPanama we conduct annual health checkups for all employees,including special tests such as chest and spinal X-rays when war-ranted by an employee’s medical history.

To fight the spread of infectious disease, we have established vac-cination programs for employees at many of our locations aroundthe world. In Mexico we participated in a national vaccinationcampaign in 2004. In partnership with private laboratories and pre-ventive-medical-services units from the Instituto Mexicano delSeguro Social, Mexico’s public health agency, CEMEX Mexicodelivered more than 2,500 doses of hepatitis A and B, measles,tetanus, rubella, and influenza vaccine to employees.

Our commitment to safety is reflected in the recognition wehave received from outside organizations. For example:*

The Consejo Nacional de Higiene y Seguridad del Trabajo (theNational Council of Workplace Health and Safety) awardedCEMEX Nicaragua its highest honor for the company’s devel-opment of a health-management system to ensure thehealth and safety of its manufacturing workers. The presidentof Nicaragua presented the award on August 18, 2004.

CEMEX Mexico received a National Safety Award from theNational Private Transport Association for its “Drive HomeSafely” program.

The Consejo Colombiano de Seguridad (the Colombian SafetyBoard) awarded our Colombia operations the Emerald Crossfor our occupational health work, in particular Plan SOL, theprogram we began in 2000 to implement our global safety-management system in all of our operations.

Among the many honors earned by our U.S. cement plantswas the PCA Safety Excellence Award, presented to ourClinchfield cement plant for operating with no lost-timeinjuries in the past 10 years.

* For a complete list of our safety awards, please visit ourwebsite.

Our employees have access to training courses onfacility training computers.

Safety awards

Employee training and developmentWe owe our competitive standing to the skill and talent of ouremployees. We invest up to U.S.$13 million per year to fosterour employees’ continued professional development. Andthrough our specialized training programs we are creating anew generation of CEMEX leaders.

> CEMEX Graduate Scholarship Program—offers qualifiedemployees graduate scholarships to top international universi-ties. Applicants must be full-time, high-performance employeeswith at least two years of seniority and must demonstrateexceptional promise and be willing to relocate internationally.

> Global Leadership Program—develops high-potential execu-tives for leadership positions through individualized programsincluding formal education, professional coaching, teamassignments with real-life challenges, and management-teammentoring.

> New Talents Program—allows selected employees or recentcollege graduates to spend one year in key operational areasand six months in the functional area most suited to theirskills and preferences.

> Web-based Training—our CEMEX Plaza intranet portal givesemployees access to our learning management system,which offers cross-functional instruction in areas such ascustomer service, finance, and project management.

28

Through Patrimonio Hoy we are creating a loyal customer basefor our products while improving the quality of life of our partic-ipants. We have also created a business model in PatrimonioHoy that we expect to generate as much as U.S.$2 million in netprofits for fiscal year 2005. As a proven, viable model for reach-ing low-income customers, the program has received the atten-tion of base-of-pyramid strategists from around the world. Weare working to expand the Patrimonio Hoy approach to ourother countries of operation. To date, we have established 61community offices in Mexico serving 103,000 families. We willimplement this program in Colombia in 2005.

Educating girls in EgyptWe continued our involvement, begun in 2003, in the Egyptiangovernment’s initiative to promote the education of young girls,a program led by Suzanne Mubarak, first lady of the ArabRepublic of Egypt. In partnership with the Assiut Governorateand the National Council on Childhood and Motherhood, webuilt and equipped eleven schools in 2003 and ten more in 2004in remote villages of Assiut. The schools, which educate girlswho otherwise would not have access to education, alsoenhance the lives of local families by serving as first aid andcommunity centers where social events, meetings, and educa-tional programs are held.

Training around the worldOur operations conduct training programs tailored to the partic-ular needs of each country’s workforce. For example, 142 cor-porate managers in Bogota, Colombia, participated in a multi-faceted workshop series entitled Enlázate con CEMEX (Connectwith CEMEX), which focused on the business aspects of pro-duction, distribution, and facilities management. In the Domini-can Republic all employees were involved in at least two devel-opment activities in the past year, averaging 5.7 hours ofinstruction per employee. In Mexico, 405 employees took part incourses on creativity and strategic thinking. Each of ouremployees in Mexico is encouraged to create an individualdevelopment plan that charts a course for enhancing his or herprofessional capabilities.

Partnering with communitiesWe partner with our communities to develop and implementprograms to address local needs and improve quality of life. Wecontribute directly to philanthropic causes, donating money andbuilding materials to support educational, health, environmen-tal, and cultural initiatives. We also encourage CEMEX employ-ees to participate in volunteer activities. More importantly, weinvest significant time and resources to create model programsthat foster self-sufficiency, improve socioeconomic well-being,and provide greater access to our products and services.

Patrimonio HoyEstablished in Mexico in 1998, Patrimonio Hoy is our flagshipinitiative to provide low-income families with reliable access tolow-cost materials to upgrade their homes. We help organizegroups of individuals that pool money in a structured savingsplan to purchase our high-quality building materials at locked-inprices. We also offer participants technical advice and compre-hensive customer service, including conveniently scheduleddeliveries that reduce construction waste resulting from lack ofon-site storage.

The program has been very successful, eliminating the creditissues that have prevented customers with limited financingoptions from achieving their construction goals. For example, onePatrimonio Hoy participant, who previously lived in a single-roomdwelling with her family of six, has been able to add seven roomsand a set of stairs to her house over the past five years.

The schools we have built in Assiut, Egypt, provideinspiration to residents by joining the promise ofsocioeconomic advancement for rural Egyptianwomen with architectural beauty and functionality.

29

Building a cultural center in Bogota, ColombiaWe have entered into an alliance with Corporación día del Niño,an educational NGO, and the Barrio Mexico community in thesouthern part of Bogota, Colombia, to build a cultural centerthat will serve more than 1,300 families. CEMEX has taken aleadership role in the project, donating land, participating inarchitectural planning, and constructing the building, which willbe completed in 2005. CEMEX serves on the center’s board ofdirectors and will fund a children’s center that will promote chil-dren’s rights and cultural development in the community.CEMEX has commited to assist in the project for three years.

We support community well-being through targeted health andwellness programs. For example:

NicaraguaWe helped fund a mobile health diagnostic unit aspart of an initiative promoted by the office of the firstlady, Mrs. Lila T. de Bolaños.

MexicoWe partner with local health organizations such asCentros de Salud and COMUSIDA Zapotiltic (theZapotiltic Municipal Council for the Prevention ofAIDS) to present seminars on topics such as HIV-AIDsawareness, drug- and alcohol-abuse prevention, den-tal and vision care, and healthy lifestyles.

Dominican RepublicCEMEX supported the formation of DSPLR (theDominican Society for the Prevention of Labor Risk),the first professional organization in the country ofits kind. Together with DSPLR and INTEC University,we are implementing a construction safety programto reduce workplace sickness and accidents in ourindustry.

Costa RicaWe provided medical services for 305 school childrenfrom 15 schools in 2 communities and also spon-sored a Healthy Skin Day during which more than800 community members were treated by 10 partici-pating dermatologists.

PhilippinesOur medical, dental, and Feed-a-Kid programs focuscommunity attention on health and hygiene.

In 2004 we continued our Granja Integral project inColombia, which supports farming and animalhusbandry activities in local communities by pro-viding families with sheep or pigs to start theirown farms and by teaching courses in the prepara-tion of meat products, crop cultivation, and wormfarming. In 2004, 210 people participated in thisprogram.

For the second consecutive year, CEMEX Mexico hasreceived the ESR award presented by CEMEFI (theMexican Center for Philanthropy). Each year the ESRaward recognizes excellence in corporate ethics,employee programs and workplace quality of life,community relations, and environmental perform-ance. CEMEX Mexico was honored to receive CEMEFIBest Practices awards in 2004 for its Congruenciaand Patrimonio Hoy programs.

Promoting health and wellness in the community

30Community-development programs*

Bangladesh

Following the devastating floods of August 2004, we participated in

local flood-relief programs, providing 2,600 families with food and

other supplies purchased with company funds. CEMEX employees

in Bangladesh and our other Asian business units also contributed

to the efforts.

Colombia

Through our partnerships with ASOCRETO and ICPC, the Colombian

concrete and cement producers associations, and the IDU (the

Institute of Urban Development), we teach construction professionals

how to use our products and meet their building challenges. These

programs also promote the broader use of our products.

Costa Rica

Together with the city of San José and ROI Consultores, we partici-

pate in El Barrio que Queremos, the Neighborhood We Love, a pro-

gram whose goal is to work with municipal authorities to build streets

and security and public transportation infrastructure.

Dominican Republic

We launched the CEMEX with Schools program to promote ecological

curricula in community schools. We sponsored ecological workshops in

which the state educational department, educational professionals, the

PLAN LEA project, and CEMEX employees participated.

Egypt

We partnered with the Future Generation Foundation (FGF), a non-

profit NGO that works to develop Egypt’s human resources by offer-

ing worker training and development programs. CEMEX sponsored

FGF charity events and provided scholarships to Assiut youth.

Mexico

Our Congruencia program promotes social equality and access for

disabled people by supporting handicapped-accessible infrastructure

projects and purchasing goods and services from suppliers that

employ disabled workers.

Panama

We hosted a full-day safety event for employees’ children, Getting to

Know my Dad's Work, featuring presentations by firefighters, police offi-

cers, and safety-equipment suppliers. We also conducted a “clean

hands” campaign.

Philippines

We support ongoing projects in several communities focusing on chil-

dren’s education such as our Isang Lapis, Isang Papel, or One Pencil,

One Paper program.

In the Philippines our medical, dental, and health-education programs afford local communitiesgreater access to health care and heighten aware-ness of health and hygiene issues.

* For more information on our global community initiatives,please visit our website, www.cemex.com.

31

Accident rate is the result obtained by multiplying the num-

ber of lost-time injuries recorded in a one-year period by 100

and dividing the product by the number of employees in the

same period.

Aggregates are sand and gravel mined from quarries, which

give ready-mix concrete its necessary volume and add to its

overall strength.

Calcination is the process by which limestone, clay, and iron

oxide are heated to produce clinker.

Cement is a powdery binding material that is mixed with sand,

gravel, or other aggregates to make concrete.

Clinker is an intermediate cement product made by sintering

limestone, clay, and iron oxide in a kiln at around 1,450 degrees

Celsius. One metric ton of clinker is used to make approximate-

ly 1.1 metric tons of Gray Portland cement.

Concrete is a mixture of cement as a binding agent, fine

aggregates (sand), coarse aggregates (gravel), and water.

EBITDA is operating income plus depreciation and amortiza-

tion. Amortization of goodwill is not included in operating

income but is instead recorded in other income (expense)

below the operating line. EBITDA does not include certain

extraordinary income and expenses that are not included in

operating income under Mexican GAAP. EBITDA is not a GAAP

measure.

Ecoefficiency is the optimization of energy and raw materials

to produce an economic and environmental benefit by reduc-

ing environmental impact.

Free cash flow equals EBITDA minus net interest expense,

capital expenditures, change in working capital, taxes paid, and

other cash items (net other expenses less nonoperating asset

disposal).

Interest coverage equals EBITDA divided by financial expenses.

Lost-time injury is a work-related injury causing an absence

of one or more working days (or shifts), counting from the day

after the injury until the person returns to normal or restricted

work.

Metric ton is the equivalent of 1.102 short tons.

Net debt equals total debt plus equity obligations minus cash

and cash equivalents.

Pozzolana is a volcanic ash that contains silica, alumina, lime,

and other materials and which is used in the preparation of

hydraulic cement.

Ready-mix concrete is a mixture of cement, aggregates, and

water.

Sustainable development is defined as forms of progress

that meet the needs of the present without compromising the

ability of future generations to meet their needs.

Glossary

32

We believe that this sustainability report gives us an

opportunity to engage in candid dialogue with our

stakeholders regarding sustainability issues, challenges,

and opportunities. We welcome your comments and

suggestions.

Headquarters:

CEMEX

Av. Ricardo Margáin Zozaya 325

CP 66265 San Pedro Garza García, N.L. México

Tel: (5281) 8888.4197

From the United States 1.800.IN.CEMEX (1.800.462.3639)

Fax: (5281) 8888.4417

Email address:

sd@cemex.com

Website:

www.cemex.com

Contact information for our country offices can be

found on our website at

www.cemex.com/directory

Contact information

Table of contents

Pg. Section GRI IndicatorIFC About this report 2.11, 2.12, 2.13, 4.12 Message to our stakeholders from

our Chairman and CEO 1.24 CEMEX company profile 2.1, 2.2, 2.3, 2.4, 2.5, 2.14, 3.18 8 Our sustainability vision, strategy,

and management 1.1, 3.7, 3.14, 3.1910 Governance 3.1, 3.2, 3.5, 3.6 11 Stakeholder engagement 2.9, 3.10, 3.12

14 Economic performance 2.7, 2.8, 3.20, EC118 Environmental performance 3.20, EN2, EN8, EN17, SO424 Social performance 3.20, LA5, LA7, LA17, SO1, SO431 Glossary32 Contact information 2.10, 2.22

We have used the Global Reporting Initiative (GRI) 2002 Sustainability ReportingGuidelines as well as the Cement Sustainability Initiative Agenda for Action to inform thecontent and structure of this report. Detailed descriptions of the GRI indicators listedabove can be found at www.globalreporting.org/guidelines/2002.asp.

About this reportCEMEX’s 2004 sustainability report is an important part of our ongoing efforts to com-municate our approach to sustainable development and our company’s economic,social, and environmental performance. In this report—our second—we further defineour commitment to you, our stakeholders, and discuss how we see CEMEX contributingto a sustainable future.

Unless we have indicated otherwise, the information presented in this report coversCEMEX’s global operations for the 2004 calendar year and includes aggregated datawherever possible.

Reporting historyCEMEX first published an environmental report in 1995. Our next report covered ourenvironmental, health, and safety performance for 1996 and was followed by annualEHS reports. In 2003 we issued our first sustainability report. All of our reports publishedsince 1997, including sustainability, EHS, and annual financial reports, can be found onour website, www.cemex.com.

2

The information presented herein contains certain forward-looking statements and information relating to CEMEX,S.A. de C.V. and its subsidiaries (collectively, “CEMEX”) that are based on the beliefs of its management as well asassumptions made by and information currently available to CEMEX. Such statements reflect the current views ofCEMEX with respect to future events and are subject to certain risks, uncertainties, and assumptions. Many factorscould cause the actual results, performance, or achievements of CEMEX to be materially different from any futureresults, performance, or achievements that may be expressed or implied by such forward-looking statements,including, among others, changes in general economic, political, governmental, and business conditions globally andin the countries in which CEMEX does business; changes in interest rates; changes in inflation rates; changes inexchange rates; the level of construction generally; changes in cement demand and prices; changes in raw materi-al and energy prices; changes in business strategy; and various other factors. Should one or more of these risks oruncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially fromthose described herein as anticipated, believed, estimated, or expected. CEMEX does not intend, and does notassume any obligation, to update these forward-looking statements. In addition, certain information presented here-in was extracted from information published by various official sources. This information includes statistical informa-tion relating to the cement industry and information relating to the countries in which CEMEX operates. CEMEX hasnot participated in the preparation or compilation of any of such information and accepts no responsibility therefor.

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